UK HOUSING MARKET UPDATE

Written by Hugo Belgrove, on his work experience with Knight & Knoxley. 

House prices dropping: 

The housing market is slowing and property prices have fallen from their peak levels - but predictions of a dramatic price fall are yet to materialise. Nevertheless, mortgages are rising to 6% which will continue to slow down the market and experts are stating that the economy will drag the price of houses down in 2025 by 35%.

Effected areas: 

South East, South West, East Midlands and East of England are all expected to have their house prices drop significantly. This is because there is a vast difference between the number of houses on the market and the number of proceedable buyers. In the past month alone 18% more houses were on the market than in the last 5 years. The stock level hasn’t been this high since the pandemic when the market was booming and vendors were trying to take advantage of the £50,000 increase in house prices.

Inflation and mortgages:

The average UK salary is £27,000 and with inflation rising faster than wages it is making it increasingly difficult to get mortgages. Unless banks reduce the interest rate to their customers the majority of the lower to middle earners will suffer.

Conclusion: 

There will be a high number of properties expected to drop in value due to the economic state of the UK. There has already been a nearly 20% increase of houses sitting on the market due to the drop in demand. With mortgage rates continuing to increase, the property market remains at risk of collapse.